In 2010, there were almost 28 million small businesses in the US alone, and that number is estimated to have increased now we’re in 2017. With that amount of businesses up and running, there will be millions of business owners frantically trying to get their expenses sorted and organized before the tax year comes to an end.
But, to avoid the mad year-end rush, keeping an eagle eye on your expenses all year round will be a huge advantage. You’ll not only save time but will also likely save yourself a lot of stress and hassle too! But keeping track of business expenses is often easier said than done, with many unsure of the correct steps to take to ensure maximum organization and efficiency. So, if you struggle to keep track of your expenses and want to turn things around, here are a few easy ways you can make the job a whole lot simpler!
Keep personal and business finances separate
One of the most common mistakes new business owners make is failing to create a new account solely for business expenses. Having two separate accounts for both business and personal spending is essential to ensure you accurately keep track of your business’ outgoings and won’t get confused with money you’ve spent on personal items.
This will also make it much easier to keep track of your receipts (which we’ll get onto in a moment!) so, when the time comes for your tax to be calculated, you’ll easily be able to locate your business receipts without having to wade through an array of personal purchases.
Plus, if you ever find yourself needing a loan, it’s essential it’s placed into the correct account for which it’s intended otherwise you could end up paying tax on a loan that’s not business related. Click here for more loan information.
Keep track of your receipts
With many businesses making office purchases both online and in-store, it can be difficult to keep all your receipts on track and in the same place.
If you find yourself frequently losing receipts or simply forgetting to file them, allocate an envelope or shoebox to them and make sure to place it in an easy-to-see location. And, if you find yourself making business purchases online, print off any online receipts or proof of purchase and place them in your allocated receipt spot. Then, both online and in-store purchases will be kept together, making organizing your business expenses much easier in the long-run.
Don’t be afraid to ask for help
Whilst it’s all good to keep your personal and business accounts separate and keep track of all your receipts in the same place, taking charge of your expenses and staying within budget can still be a challenge.
So, if you still find yourself struggling even after making positive changes, don’t let pride stand in the way of hiring an accountant. Plus, accountants or tax agents will be constantly up-to-date with any tax law changes and will make sure your expenses are always correctly filed in the eyes of the law!
Keeping note of expenses is something many people forget about when running a business, despite it being hugely important. But as long as you’re methodical and organized, it doesn’t have to be the stressful chore it’s often made out to be!
